PayPal Stock Forecast: Pre-market price in green while sentiments remain neutral. Will PayPal bounce back?

PayPal Stock Forecast: Pre-market price in green while sentiments remain neutral. Will PayPal bounce back?
PayPal logo can be seen at its office in San Jose, California, United States on November 23, 2019. PayPal has agreed to acquire Honey Science Corporation, a rapidly-growing technology platform for shopping and rewards, for approximately $4 billion. (Photo by Yichuan Cao/NurPhoto via Getty Images)
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PayPal Stock Forecast: Shares of PayPal Holdings Inc (NASDAQ: PYPL) are expected to trade between $172 and $187. The overall recommendation is Sell

1 of 3 momentum indicators are positive
2 analysts

PayPal Latest Price

Shares of PayPal Holdings Inc closed 0.51% higher at $184.86 in the last trading session.

PayPal Stock Forecast

PayPal Stock Forecast: Performance Chart

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PayPal Stock Forecast: Momentum Indicators

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Share Volume: 13.3 Million

3 Month Average Volume: 15.6 Million

Market Cap: 217 Billion

Forward P/E Ratio: 44.44

PayPal Stock Forecast: Technical Analysis

$171 (S3)
$188 (R1)
$173 (S3)
$187 (R1)

Technical stock analysis | Stock price watchlist | eToro swing trading | ATVI PYPL ADSK TTWO | WN48 (Foreign Accent)

PayPal Stock Forecast: Sentiment Analysis

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PayPal Stock Forecast: Latest News and Tweets

Originally tweeted by GodzillaOptions (@GodzillaOptions) on December 7, 2021.

$PYPL daily chart with weekly levels. Would be looking for an entry over >190.35 to confirm the weekly reversal. Look at that move from 193.90 -> 215.97. Decent OI on those weekly 200C contracts 👀

Also Read: Tesla Stock Forecast

PayPal Stock Forecast: Latest Videos

1 Stock I’m Watching VERY Closely – PayPal Stock (PYPL)

PayPal Holdings Inc Background: –

PayPal is an American multinational financial technology company operating an online payment system in majority of countries that supports online payment system and provides an alternative to traditional paper currency. It acts as payment processor for online vendor, auction sites and many other commercial users, for which it charges a fee.

It was established in 1998 as Confinity, and went public through IPO in 2002. It became wholly owned subsidiary of eBay in that year itself at a valuation of $1.5 billion. Finally, in 2015, eBay spun off PayPal and it again became an independent company. It was ranked at 134th place in Fortune 500 of the largest United States corporations by revenue.

Reasons for PayPal’s Recent Sell –Off

  • Since mid-October, fintech giant has fallen 30 percent from around $270 to $190 per share and recently on 15th November, PayPal shares sank 4.36 percent after Bernstein analysts downgraded the rating from Buy to hold and cut the target price from $260 to $220 citing broad array of risks for the company.
  • Analysts concerns hovers around e commerce platforms like Shopify and Amazon launching their own payments platforms. Also PayPal Venmo is currently “severely under monetized” according to analysts.
  • PayPal is surrounded by a number of other payment solutions ranging from Apple Pay and pay later options from Affirm and Klarna and these are all growing at an annual rate between 50% to 100%.
  • Also Square’s intent to buy Afterpay is headwind for PayPal as it faces further competition from Square’s Cash App. So PayPal now risks being disrupted by peers instead of being a disruptor.
  • Finally, PayPal has suffered due to underwhelming guidance update and management projecting slower than expected sales growth in the near term. Due to which, sell side community slashed target price.    

Better Stock to Buy: PayPal or Affirm?

  • At peripheral look, PayPal and Affirm (Nasdaq: AFRM) might look very different fintech companies but their interests have started overlapping in the last year and Affirm is emerging as potential competitor to the PayPal in long term.
  • PayPal after being spun off from eBay, owns one of the largest digital payment platform in world with 416 million users and also owns Venmo, a leading peer to peer payment app with over 80 million users. Affirm owns one of the largest buy now, pay later (BNPL) platform.
  • Affirm has 8.7 active users and over one lakh active merchant and PayPal recognising that launched its own “Pay in 4” BNPL service last year. It is also planning to buy Japanese BNPL platform Paidy for $2.7 billion.
  • Investors are showing much more interests in Affirm and its price has soured 130 percent in the last six months, primarily due to partnerships with Amazon, Walmart, Shopify and American Airlines, whereas in the same period, PayPal has decreased nearly 25 percent.
  • PayPal revenue rose 21% to 21.45 billion in fiscal 2020, and has grown 20% YoY in first nine months for 2021, whereas Affirm revenue soared 93% in fiscal 2020 and then another 71% in fiscal 2021. Affirm users more than doubled last quarter YoY, but for PayPal it is growing at rate of around 14%.
  • PayPal is consistently profitable and trades with 35 times forward P/E ratio, whereas Affirm is not profitable yet and still trades at 28 times forward P/E ratio and more importantly its losses widened in 2020 and first quarter of 2021. So, PayPal is better valued compared to Affirm.
  • PayPal is much safer, profitable and better diversified than Affirm. Affirm has a super growth trajectory but it is still not clear whether its business model is profitable or not.

Catalysts for Future Growth:

  • PayPal is the most accepted digital wallet in North America and Europe. PayPal has a large customer base and their data makes PayPal a valuable business partner, empowering merchants to make more relevant product recommendations and personalised deals.
  • PayPal has launched a number of new products like Venmo credit card, cryptocurrency trading and “Buy Now Pay Later”. But its most significant move came in September, when it launched its own mobile app featuring shopping tools, deals and rewards along with bill payment and also direct deposit services.
  • E- commerce has been a significant tailwind for PayPal offering clockwork for last four years and e marketer believes that online retail spending will reach $4.9 trillion in coming years and so PayPal still covers only 20 % and has much room to grow.

Future Outlook for PayPal After Disappointing Q3 Results.

  • PayPal announced Q3 results on 8th November and results missed markets expectations. It reported revenue of $6.18 billion vs $6.23 billion expected and earnings per share of $1.11 adjusted vs expectations of $1.07.
  • PayPal reported a revenue growth of 13% YoY and payment volume rose 26% to $310 billion and company added 13.3million net new active accounts, bringing the total customers count to $416 million.
  • PayPal has missed Wall Street expectations for second straight quarter and investors are particularly fumed over cancellation of acquisition of social media app Pinterest by PayPal.
  • But, company has solid financials having a realistic view about the future. It is true that it faces lot of competition from its peers, but this needs to be kept in mind that competitors like Affirm is yet to be profitable and PayPal is continuously expanding its horizon to deal with this stiff competition.
  • PayPal is a buy opportunity after 30 percent correction mainly because it is much safer, more financially sound and on right trajectory to give decent return in long term.

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